Dr. Casiel Ato Forson, the Finance Minister nominee, appeared before Parliament’s Appointments Committee today, addressing key questions on revenue mobilization, tax reforms, and macroeconomic policy. In a detailed session, he outlined strategies to improve Ghana’s economic stability without overburdening citizens with additional taxes. His focus on Ghana economic stability is integral to his plans.
Improving Tax Revenue Without Raising Taxes
Responding to concerns about bridging the revenue gap while honoring the NDC’s campaign promise to scrap certain taxes, Dr. Forson emphasized the importance of compliance over tax hikes. He noted that Ghana’s current tax revenue-to-GDP ratio of 13.8% could be improved significantly, which is crucial for Ghana economic stability.
“Ghana has huge potential when it comes to tax revenue mobilization. You don’t necessarily have to increase taxes to rake in revenue,” Dr. Forson stated. He pledged to collaborate with the Ghana Revenue Authority (GRA) and the Tax Policy Unit at the Ministry of Finance to boost compliance and enhance efficiency, aiming at Ghana economic stability.
In the medium term, Dr. Forson aims to increase the tax-to-GDP ratio to 16-18%, aligning Ghana with its peers. He also criticized certain taxes, like the betting tax, as “nuisance taxes” with minimal impact on revenue collection. “For example, the betting tax is bringing in less than 50 million Ghana cedis annually. Scrapping such a tax will not significantly affect the economy,” he argued, highlighting a step towards economic stability in Ghana.
Addressing High Interest Rates
When questioned about Ghana’s historically high interest rates and their impact on the private sector, Dr. Forson pointed to excessive government borrowing as a key driver. He cited the government’s weekly rollover of approximately 111 billion cedis in treasury bills, which he said exerts upward pressure on interest rates and crowds out the private sector.
“Interest rates are often a function of inflation. That’s why we must immediately work to bring inflation down, stabilize the exchange rate, and create jobs,” he explained. Dr. Forson also stressed the urgent need for fiscal discipline, including cutting wasteful expenditure.
“The time is now. We must cut waste and reduce borrowing. This will create room for the private sector and lead to a reduction in inflation and interest rates,” he said, which is essential for Ghana economic stability.
A Vision for Economic Stability
Dr. Forson’s responses reflect a commitment to balancing fiscal discipline with policies that promote economic growth. By improving tax compliance, reducing wasteful expenditure, and stabilizing inflation, Ghana economic stability can be achieved.
